Long press the QR code or click "Read Original" to register. 30+ industry experts, 100+ B2B platform founders, 800+ manufacturer and distributor friends, gather in Fuzhou to discuss the Internet transformation of the FMCG industry. This article has been authorized Yonghui Superstores has invested 660 million yuan to initiate the establishment of Huatong Bank, planning to integrate the company's own advantages and resources, promote the integrated development of financial capital and industrial capital, broaden financing channels, revitalize available resources, enrich business areas, and enhance overall competitiveness. Huatong Bank will focus on technology finance, inclusive finance, convenient payment, and supply chain finance. Among these, supply chain finance is the piece of meat Yonghui Superstores wants to eat. Official jargon may not be easy to understand, so let me give an example to illustrate what supply chain finance means. Yonghui Superstores has a good friend called Bubugao, which started a small loan company last year to lend money to suppliers. This year, it started making some money. In the first half of the year, Bubugao's small loan company had revenue of 22.38 million yuan, and guess the profit? As high as 19.5 million yuan! Think about the gross margins in supermarkets—are you still embarrassed to talk about product structure, category adjustments, and all that? Does it bring in money? If not, why bother? Supply chain finance equals making money, and it can make big money. Do you really think retail giants like Walmart rely on retail gross margins to survive? The Sam family is making a fortune. Why Supply Chain Finance Has Potential Most retail businesses have a credit period of 60 days, but in recent years, the average overdue days have been worsening, with many companies moving toward 90 days or even longer. This year's social retail index may fall below 10, indicating consumption is not optimistic. Most companies use credit sales, overdue payments, and arrears. Once any fluctuation occurs, the profits a company has worked hard for a year may be lost. Recently, well-known companies like Qipaiwang and Xidelong collapsed due to financial problems. According to surveys, only 31% of difficulties faced by companies are due to intensified competition, while up to 63% are due to financial problems. How to solve financing issues has become a lingering dream for vulnerable companies. Financing channels are scarce, financing costs are high, and the pressure on retail companies to occupy funds is increasing, worsening the survival environment for vulnerable suppliers. Generally, retail companies cooperate with suppliers in three ways:

  1. Distribution: For big players like P&G and Unilever, retail companies have little say in negotiations.
  2. Consignment: Settlement is based on actual sales. Suppliers have some say depending on their strength.
  3. Joint operation: Not only high commission rates but also guaranteed minimums; basically, retailers can do whatever they want. These suppliers are weak, have low risk resistance, and lack financing channels, making them the core customer base for supply chain finance in the future. Financing difficulties for vulnerable companies are common, and they typically rely on private financing channels. Private lending rates are generally above 1.5 li (i.e., 18% annualized). Rates of 1.5 li or below are usually for loans by public officials, requiring stability. This money cannot be defaulted on; otherwise, even if you successfully flee, you might soon be caught across provinces. 2 li is a relatively reasonable range for private lenders' expected returns, corresponding to an annual interest rate of 24%. State-owned bank financing costs mainly range from 5-10%. Vulnerable suppliers have low credit ratings, high commercial risks, and lack fixed assets like real estate as collateral, making it difficult to cross bank credit thresholds. Banks prefer lending to state-owned enterprises, even if they default, it doesn't matter. Some commercial banks also want to enter supply chain finance, using core enterprise endorsements to reduce risk. They mainly start with prepayments, receivables, factoring, and inventory, but commercial banks have a weakness in supply chain finance: they don't understand the industry chain's upstream and downstream, making it hard to control risk. For example, if a company wants to finance a batch of inventory, the bank cannot send someone to watch the warehouse; it might be swapped or taken away, and there are many fraud methods these days.

At this point, a gap appears in the market. In the 6%-18% annualized return range, there is a large market vacuum. State-owned banks are unwilling to do it, and private lenders think the interest rates are too low. Who will solve the market pain points of difficult and expensive financing? According to institutional forecasts, China's supply chain finance scale will reach 15 trillion yuan by 2020. The innovation of supply chain finance lies in the reconstruction of financial business models. Abstractly, the core of finance lies in funds, business, risk control, and implementation models. Innovation in the financial field also revolves around these four dimensions: trusts have established advantages over banks on the business side; Yu'ebao has smoothed interest rate differences across markets on the fund side; supply chain finance and Internet finance use big data to achieve financial reconstruction in business models and risk control. Yonghui Superstores initiated the establishment of Huatong Bank to leverage its special position in the industry, fully utilizing its advantages in logistics, information flow, and capital flow, entering supply chain finance as a core enterprise and building a new advantageous territory. Many SMEs face high financing costs. Most manufacturing companies have net profits of only 3-5%, and financing costs exceeding 15% are basically unbearable. There is an urgent need for new low-cost financing tools in the market. Huatong Bank, through Yonghui Superstores, achieves financial reconstruction in risk control, solving problems like information asymmetry, and providing an entry point to share the 15 trillion yuan supply chain finance market. SMEs can quickly obtain relatively cheap funds to accelerate enterprise upgrading and expanded reproduction. Yonghui Superstores, through financial services, monetizes the value of its industry chain, achieving a magnificent upgrade from quasi-finance to supply chain finance to the entire industry chain. Across the retail industry, profits are shifting from the front end to the back end. JD.com can remain unprofitable for years, betting everything on JD Finance, for the same reason. JD Finance, after only two years of operation, has a valuation of 46.6 billion yuan, becoming a unicorn. This is the charm and shamelessness of finance. New Era · New Distribution —— 2016 China "FMCG + Internet" Summit Forum —— This is a grand event focused on how the FMCG industry channels will transform under the trend of Internet+ transformation Conference Agenda 09:00-09:30 Registration 09:30-09:35 Host opening 09:35-10:05 2016 China FMCG Industry Trend Analysis Report — Zhao Bo 10:05-10:25 FMCG Enterprise Transformation Strategy and Path — Liu Chunxiong 10:25-10:45 Opportunities and Challenges Brought by FMCG Channel Transformation — Liu Zhao, CEO of Waiqin365 10:45-11:25 Alibaba Retail Link All-round Empowerment — Guo Kunkun, Alibaba Retail Link 11:25-12:00 Roundtable Forum — Brand Transformation: Improvement vs. Reconstruction? (Guests TBD) 12:00-13:30 Lunch 13:30-14:00 Dealer Transformation: City Distribution Trends — Wang Qi, CEO of Weijie City Distribution 14:00-14:30 Roundtable Forum — Why Should Dealers Do Logistics in Transformation? 14:30-15:00 Detailed Explanation of Zhongshang Huimin's "One Machine, Two Wings" Strategy — Su Xiaoxin, Vice President of Zhongshang Huimin 15:00-15:30 Detailed Explanation of Zhanghe Cloud Factory Strategy — Yang Lixiang, Zhanghe Tianxia (Content TBD) 15:30-16:00 Supply Chain Finance: The Lubricant for B2B Driving Traditional Business — Chen Xian, CEO of 51 Order 16:00-16:30 2B Investment Principles and Ideas — Xu Xiaoping, Founder of ZhenFund (Guest TBD) 16:30-17:00 Small Retail, Big Business Opportunities: China's Retail Transformation and Upgrade — Wang Jianfeng, General Manager of E-commerce Division, Yurun Group 17:00-17:30 Roundtable Forum — Who is the King of FMCG B2B Models? (Guests TBD) 18:00-20:00 Dinner For manufacturer and distributor friends who want to transform, this grand event is not to be missed. Interested friends can long press the QR code below or click "Read Original" to register. Registration: Long press the QR code below or click "Read Original" ↓↓↓ Click "Read Original" [Register]